Supply chain – The COVID 19 pandemic has undoubtedly had its impact influence on the planet. Economic indicators and health have been compromised and all industries are touched inside one of the ways or perhaps yet another. Among the industries in which it was clearly noticeable is the agriculture as well as food industry.
In 2019, the Dutch extension and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). According to the FoodService Instituut, the foodservice industry in the Netherlands lost € 7.1 billion inside 2020. The hospitality industry lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets enhanced the turnover of theirs with € 1.8 billion.
Disruptions of the food chain have big effects for the Dutch economy and food security as a lot of stakeholders are impacted. Even though it was apparent to numerous people that there was a great effect at the end of the chain (e.g., hoarding in food markets, restaurants closing) and also at the start of the chain (e.g., harvested potatoes not finding customers), there are a lot of actors inside the supply chain for which the impact is much less clear. It is thus vital that you find out how properly the food supply chain as a whole is prepared to deal with disruptions. Researchers in the Operations Research and Logistics Group at Wageningen Faculty and from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the consequences of the COVID-19 pandemic all over the food supplies chain. They based the analysis of theirs on interviews with around 30 Dutch source chain actors.
Need in retail up, that is found food service down It is evident and well known that demand in the foodservice stations went down on account of the closure of restaurants, amongst others. In certain instances, sales for vendors of the food service industry therefore fell to about twenty % of the original volume. As a complication, demand in the retail channels went up and remained at a level of about 10-20 % higher than before the crisis began.
Products which had to come from abroad had their own problems. With the shift in demand from foodservice to retail, the need for packaging changed dramatically, More tin, glass and plastic was needed for wearing in customer packaging. As much more of this packaging material ended up in consumers’ houses as opposed to in joints, the cardboard recycling function got disrupted too, causing shortages.
The shifts in desire have had a significant effect on production activities. In some instances, this even meant a full stop of output (e.g. within the duck farming business, which emerged to a standstill due to demand fall-out on the foodservice sector). In other instances, a big portion of the personnel contracted corona (e.g. to the various meats processing industry), leading to a closure of equipment.
Supply chain – Distribution pursuits were also affected. The beginning of the Corona crisis in China sparked the flow of sea containers to slow down pretty soon in 2020. This resulted in limited transport capability during the very first weeks of the issues, and high costs for container transport as a result. Truck travel encountered various problems. Initially, there were uncertainties on how transport would be handled at borders, which in the end weren’t as strict as feared. The thing that was problematic in many instances, nonetheless, was the availability of motorists.
The response to COVID 19 – supply chain resilience The source chain resilience analysis held by Prof. de Leeuw and Colleagues, was used on the overview of the core components of supply chain resilience:
To us this particular framework for the analysis of the interviews, the conclusions indicate that not many organizations had been nicely prepared for the corona problems and in reality mainly applied responsive methods. The most important supply chain lessons were:
Figure one. 8 best practices for food supply chain resilience
First, the need to develop the supply chain for agility and flexibility. This looks especially challenging for smaller sized companies: building resilience into a supply chain takes attention and time in the business, and smaller organizations oftentimes do not have the capacity to do so.
Second, it was discovered that more interest was required on spreading threat as well as aiming for risk reduction within the supply chain. For the future, what this means is far more attention ought to be given to the manner in which companies rely on suppliers, customers, and specific countries.
Third, attention is required for explicit prioritization as well as smart rationing strategies in cases in which demand can’t be met. Explicit prioritization is required to continue to meet market expectations but also to boost market shares wherein competitors miss opportunities. This task is not new, though it’s also been underexposed in this specific problems and was often not a part of preparatory activities.
Fourthly, the corona crisis teaches us that the monetary effect of a crisis additionally is determined by the manner in which cooperation in the chain is actually set up. It’s typically unclear precisely how extra costs (and benefits) are distributed in a chain, if at all.
Finally, relative to other functional departments, the businesses and supply chain characteristics are actually in the driving seat during a crisis. Product development and advertising and marketing activities have to go hand in hand with supply chain pursuits. Whether or not the corona pandemic will structurally replace the traditional considerations between production and logistics on the one hand and advertising on the other hand, the potential future will need to tell.
How’s the Dutch meal supply chain coping during the corona crisis?